A Picture Tells a Thousand Words

This is a very informative image, and it does indeed say a thousand words.

It shows the rapidly widening gap between profits and wages in Australia.

It also reflects the structural changes that have occured in the nation's economy during the last ten years. There changes are the culmination of a comprehensive and enduring power shift between organised labour and the corporate sector.

There are many reasons for this. Domestically, they include government policy across the last ten years directed towards weakening the power of trade unions and their capacity to use bargaining power.

Globalisation, with its investment in technology, its capacity to export jobs to low paying nations and its facility to exploit a pool of low-paid, often imported labour all contribute.

The conventional wisdom that worker's pay will increase in line with productivity has also begun to fail, as can be seen on the graph below.

This is US data, but the Australian trend is similar.

These are very dangerous trends which if history is any guide, will lead to unrest, and quite likely violence. Or, to be hopeful, the correction may occur as the result of government led reform. 

 

In the meantime, all any of us can do is to encourage our millennial offspring to join a union. At least that evens up the power balance a little, and ensures that wage theft (which for some industries now constitutes a business model) is unlikely.

When I've done this, I've also advised my children not to tell their employer that they've joined a union. In some sectors this will be a bad career move. 

That's pretty sad.

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